13.8% Versus 4.47%

4868 AND 1040ES

You’ll probably need this today to file for an automatic six-month extension on your taxes (but not an extension on any tax you may owe, which should accompany the form) . . . and you may need this to send in your first 2013 quarterly estimated tax payment.

In addition to being “the price we pay for civilization,” by the way, taxes are the way we finance our national defense and leadership role in the world. When did it become patriotic not proudly to pony up?

They’re the way we built the railroads and the Interstates, the way we financed and won World War II, the way we put a man on the moon and lay the underpinnings of the Internet. When did it become patriotic not to want to be “number #1”? (Shouting it and being it, a purist might note, are two different things.)

Taxes are also the way we pay for things like subsistence and health care for our elderly. What good son or daughter would deny them that?

Taxes are the way we pay interest on the National Debt. What proud American would see us default on that debt — even if so much of it was racked up under Reagan, Bush, and Bush to finance over-generous tax cuts for the rich and a disastrous war of choice we opposed?

A little complaining is fun, human nature, and part of our birthright. I whine, moan, and chafe like anyone else.

But . . . enough already?

25 CENTS VERSUS $1.79

So if you missed Friday, because it went up Saturday (what’s wrong with you?), you missed Dennis King questioning SodaStream’s consumer value. He buys Diet Coke for 29 cents a can and figures SodaStream’s version actually costs more. I am agnostic — I just like the diet pink grapefruit soda and the idea of saving the environment — but the SodaStream website claims a 25-cent cost “per can” which, if true, really ain’t bad. And compare the claimed 25-cent cost of a liter of soda with the liter of Canada Dry my supermarket sells for $1.79.

I also note that, for the newer SodaStreams like mine, you can get a CO2 cartridge for $50 that’s rated to provide 130 liters of soda instead of the standard 60 liters for $30. The math far exceeds my computational skills, but it seems to me this could bring the per-liter cost down . . . although what really brings it down is that after the cartridge is empty, you can exchange it for a full one at Wal-Mart or Staples or wherever for about half price.

13.8% A YEAR VERSUS 4.47%

You also would have missed Patrick Johnson’s updated spreadsheet, bringing results up all the way to last week, and bumping the average annualized return up a hair from 14.98% to 15.10%.

Daniel H: “The approach of calculating the compound rate of return by averaging the returns across the average holding periods can significantly skew the results since it can overweight or underweight each individual investment’s holding period. Fortunately, Excel gives us an easy tool to generate the internal rate of return (IRR) from a series of cash flows. On his spreadsheet, just model the outflow by a -1000 value and the resulting inflow with the corresponding final period date. I just added a column of exit dates using Patrick’s holding period added to the initial date. My stab at it using Excel’s XIRR function indicates an internal rate of return of a still very impressive 13.8%. This is the interest rate at which, if you borrowed the $1000 for each individual investment, you would have broken even at the end.”

☞ Here’s Daniel’s spreadsheet. (The “closing date” column he added is column E, which may be hidden as you view it. If you know Excel, just unhide it.) At the bottom, you’ll see Patrick’s 15.10% number, but also Danbiel’s 13.8% IRR.

Meanwhile, as has been mentioned, It would be good to have a number for the annualized rate of return from, say, the S&P 500 over those same years, by way of comparison. According to this, that index would have returned 4.47%, annualized, over the 15 years 1998 through 2012, which may be a pretty close approximation. If so, $1,000 invested in the S&P for those 15 years would have grown to $1,927 — but to $6,952 at 13.8%.